Turkey: The Turkish Sovereign Wealth Fund To Invest In Energy Generation, Petrochemical And Mining Sectors

Introduction

The Turkish Government has recently revealed an update of its New Economic Program for the three-year period starting from 2020 under the main theme of "Transformation Begins".

Investment in Several Sectors

Among other highlights from the Program, there is the promise of the Turkish Wealth Fund (the "TWF") participating in "greenfield investments" in energy generation, petrochemical and mining.

The role and investment strategy of the TWF has been a topic of debate ever since its establishment in 2016 and it has often been called in as a universal remedy on matters ranging from bank de-leveraging, to construction and energy projects.

This appears to be the first formal commitment towards deploying TWF to directly support markets.

Furthermore, the Program also announces that the mineral exploration and drilling activities are going to be continued with increasing speed. Reserves found are planned to be brought into the economy with new business models and financing mechanisms. In addition, minerals, especially boron – considering that the Republic of Turkey is known to hold 73 per cent of the world's boron reserves –, will be processed, converted into value-added products and marketed in international markets.

Conclusion

Among ambitious growth and sector targets, the Program sets out a key commitment for the TWF to be deployed directly in support of energy independence, which has been a long-standing strategic goal. To that end, the markets are now expecting consequential investments in the petrochemical, mining and especially energy generation industries are expected from the TWF.

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